"I am Misha Borisovich Vainberg," says the narrator of Gary Shteyngart's brilliant, scathing new novel, "a grossly overweight man with small, deeply set blue eyes, a pretty Jewish beak that brings to mind the most distinguished breed of parrot, and lips so delicate you would want to wipe them with the naked back of your hand." It's the word "naked" that's the key. This is a satire, an irrepressible, fiery and hilarious one, but it's also surprisingly sensuous. Most satires exist in the brain and the gall. Absurdistan adds a stomach and a libido. You will feel fondled by the time you finish but you'll also feel well-fed.

Misha lives in St Petersburg and is the son of the "1,238th richest man in Russia", which nevertheless gives him an almost unlimited bank account. Misha spent nine years in the US, attending Accidental College before moving to Manhattan and falling in love with his "giant multicultural swallow" of a girlfriend Rouenna, who's black but also "half Puerto Rican. And half German. And half Mexican and Irish". She's visiting Misha in Russia because Misha's "Beloved Papa" murdered an Oklahoma businessman called Roger Daltrey ("Who?" Misha asks when he first hears the name). US immigration won't let in the son of a murderer, so Misha - "an American cruelly trapped in a foreigner's body" - is stuck waiting for the impasse to end.

But then Beloved Papa is assassinated, and in this new wild west Russia not only do the assassins - Oleg the Moose and his syphilitic cousin Zhora - invite themselves to the funeral, they tell Misha: "In a way, we're all responsible." After disastrously sleeping with his newly widowed stepmother, Misha decides he must find a way to get himself back to America, back into the arms of Rouenna, who has returned to New York and taken up with "Jerry Shteynfarb", a loathsome author and former college friend of Misha's who writes books very much like this one.

Somehow this leads Misha to the small, oil-rich, former Soviet Republic of Absurdsvani. There, for reasons too complicated to explain, Misha can purchase a Belgian passport ("I considered all the things I wanted to know about Belgium. There weren't many") and at least enter the EU. No sooner has he spilt vodka on his new passport for luck, however, than a civil war breaks out between the Svani and the Sevo, Absurdsvani's two ethnic groups, divided forever in a religious schism over whether Christ's footrest on the cross leant to the right or to the left. Not even brand-new Belgians can leave the country.

Misha, with his great girth, huge appetites, and cash-rich wallet, soon finds himself a main player on the Sevo side, even being promoted to Minister for Multiculturalism - after explaining to the Sevo what multiculturalism actually is - and wooing Nana, the American-educated daughter of the Sevo warlord. But there's something about the war that isn't quite right. Could it have to do with the local American defence contractors, who the Absurdsvani prostitutes refer to as "Golly Burton"? Where can "a sophisticate and melancholic" like Misha turn when all seems lost?

Shteyngart is one of Granta's new Best Young American Novelists (and yes, now published by Granta Books, but more than good enough to evade any question of favouritism). He's a Jewish Russian who emigrated to America at the age of seven, and he is merciless to his own religion and nationalities. He's also - in his portrayal of the vicious, rampant capitalism stripping the life out of Putin's Russia and of the band-aid of multiculturalism on the gaping wound of sectarianism - unflinching in the face of the unbridled greed that might very well be the death of us all.

His first novel, The Russian Debutante's Handbook (lampooned in Absurdistan as Shteynfarb's The Russian Arriviste's Hand-Job), was a satire about a Russian immigrant to the US launching a disastrous pyramid scheme among other expats. Here, his concerns are the same: immigration, nationalism, capitalism and the fracturing of the world, all seen through the eyes of de-Sovietised Russians, "busybody peasants thrust into an awkward modernity". In spirit and goal, Shteyngart evokes (and indeed namechecks) Joseph Heller and Evelyn Waugh and more than bears the comparison. Absurdistan's closest spiritual brother, however, is John Kennedy Toole's A Confederacy of Dunces, with its over-sized, flatulent hero Ignatius J Reilly, whose incompetence at handling modern life is matched only by his supreme unawareness of that incompetence.

Misha is an endless body of need with "enormous flounder lips cleansed hourly by vodka" and a severely scarred "khui" resulting from a botched, late-in-life circumcision, including a patch that is "a vivid evocation of the bombing of Dresden". He can afford regular transatlantic phone-calls to $350-an-hour Park Avenue therapist Dr Levine and constantly demands food and sex and touch and smell like a giant, rich baby. All of which could have been unbearable had Shteyngart not given him a voice so rich and exuberantly funny.

Of gold-digging relatives at his father's funeral, he tells us: "The number of Vainbergs, young and old, still haunting the Earth amazed me. During the thirties and forties, Stalin had killed half my family. Arguably the wrong half." Or after meeting some garrulous oilmen, he wonders if "coastal liberals didn't understand the cultural relativism in being from Texas". And then there's the grant proposal Misha writes for a Museum of Sevo-Jewish Friendship so gleefully wrong (its exhibits include the "Think It Can't Happen Again?" annexe and "Holocaust for Kidz") that you find yourself looking over your shoulder lest someone castigate you for laughing at it.

Shteyngart's writing is so consistently good, in fact, that it's hard to resist the temptation to quote it at length. So I won't. One of Misha's misguided projects is "Misha's Children", basically throwing money at as many hopeless orphans as he can find, including a group he sees waiting to cross the road in St Petersburg:

"Diminutive, cherubic, Slavic, they stood by the teeming Bolshoi Prospekt with those idiotic red flags, their puffy faces producing small steam clouds that looked like little child-thoughts struggling in the monumental cold ... But even with my largesse, I could see nothing positive befalling them. A temporary respite from alcoholism, harlotry, heart disease and depression. Misha's Children? Forget it. It would make more sense to have sex with their teacher and buy her a refrigerator."

Although the book remains surprisingly upbeat, it is to Shteyngart's eternal credit that he declines to look away when things get really ugly. There are darker hints lurking in Misha's descriptions of his father, and the insulation from the world that his fat provides might also be a layer of protection for a far more personal hurt, the hurt of a body that's been violated. "Look at what they did to my heart," Misha says, and the heart, of course, is Russia's.

Near the end of the novel, Misha has a spectacularly unpleasant encounter with a Sevo refugee and her young daughter. The mother, almost automatically, offers her child to Misha for sex in exchange for protection. Misha's reaction is shockingly violent and Shteyngart sucker-punches us with a perfectly timed reminder that, laugh though we may, the world is really like this, breaking into pieces, running out of resources, and that now that there is nothing left to pillage, we have no choice but to eat ourselves. In fact, as with all of the very best satires, it's only a matter of time, maybe even months, maybe even days, before we won't be able to regard this as a satire at all.

· Patrick Ness's most recent book is Topics About Which I Know Nothing (Harper Perennial)